2 Upper Crust franchises shut down

Were in process of repaying workers

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An Upper Crust Pizzeria franchisee who last June was ordered to pay more than $80,000 in back pay by the Department of Labor for violating federal overtime and record-keeping laws has closed his two restaurants, in Salem and Beverly.

Michael Buchhalter failed to pay 11 kitchen employees in his Salem location overtime when they worked more than 40 hours a week, the Department of Labor ruled last year. The agency also concluded Buchhalter did not maintain accurate records of employees’ hours between January 2009 and April 2011 - the time period examined by the department.

Buchhalter did not respond to a request for a comment, but Andrew Upton, a lawyer representing Upper Crust LLC, confirmed that the two pizza shops closed last weekend.

“We’re disappointed that the franchisee has decided not to continue,’’ he said. “We are currently reviewing possible future options for those locations.’’

Upper Crust Salem so far has paid $74,117 of the $80,554 in back wages and liquidated damages to date, according to the Labor Department. Liquidated damages are paid to the employees in part to compensate them for loss of the use of money they should have been paid.

Labor Department spokesman Ted Fitzgerald said the unpaid amount could be because of delays in locating workers.

Fitzgerald said that if the total remains unpaid, “the matter could be referred to the regional office for collection.’’

As franchises, the Salem and Beverly restaurants are operated by an individual entrepreneur. The Upper Crust LLC itself, which runs more than a dozen corporate-owned shops in the Boston area, also has come under scrutiny by the Labor Department and other state and federal agencies for its employment practices.

The company was ordered to pay more than $341,000 to 121 employees after a 2009 Labor Department investigation determined it failed to pay overtime hours to delivery drivers and hourly employees, such as cooks, counter help, and managers.

New allegations surfaced last year that the upscale chain forced some workers, primarily illegal Brazilian immigrants, to give back overtime payments by deducting money from their weekly paychecks. Other employees have accused the company of firing them after they refused to surrender their settlement checks.

Upper Crust has denied all of the allegations.

The law requires that covered employees be paid time-and-one-half their regular rates for every hour they work beyond 40 in a given week. The law also says employers must maintain accurate records and prohibits them from retaliating against employees who exercise their rights.